The six States of the South/South zone took a decisive step well ahead of the  Revenue Mobilisation and Fiscal Commission’s zonal hearings across the nation, to present a joint-communique that addressed the critical situation of the review of revenue allocation formula and principles from time to time, to conform to changing realities. The focus of the hearings as provided by the Commission, was on vertical allocation which focuses on the revenue sharing formula strictly between the three tiers of the Executive, namely, Federal, State, & Local Government authorities. The current formula allocates approximately 52.68% of revenues to the Federal Government, 26. 72% to the States, and 20.60% to Local Government councils.

Ahead of the presentation of the joint resolution, Cross River State Governor, Sir Ben Ayade established a committee to elucidate the position of Cross River State, with a proposition to the other zonal States for the inclusion of a special status for the State. The crux for the demand of this special status for the State is the ceding of its oil wells to Cameroun, a decision that was made without the input or consent of the citizens of the State. This mandate for negotiating and lobbying for the position of Cross River State among the States of was anchored by the State’s Commissioner for Finance, Mr. Asuquo Ekpenyong Jr. who, after series of engagements and lobbying received a node from the other five States of the South/South zone to support the Cross River’s position.

At the actual hearing, the States presented a review of the vertical allocation formula to 35% for the Federal Government, 42% to the States, and 23% to the Local Government Councils, as well as, the creation of a special status for Cross River State with the establishment of 1.5% of the Federation Account allocated to Cross River monthly. Speaking on the proposed special status, Ekpenyong Jr. stated that “The implementation of a special status of 1.5% funding from the Federation accounts for Cross River State is hardly enough, but will be the commencement on the long road to adequately compensate the good people of Cross River State for the injustice meted out by previous administrations in the ceding of Bakassi”.

He noted sadly that, the loss of littoral status and consequent loss of 13% derivation earning status was an insult on an injury that should have been resisted vehemently by previous administrations, assuring however, that that the present administration is resolute in its determination to ensure that justice is not just done but seen to be manifestly done as far as this issue is concerned.”


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Cross River ranks top on the World Bank States Fiscal T r a n s p a r e n c y Accountability and Sustainability (SFTAS) Programme, as accurate indicators Show from Performance Assessment (APA) that was carried out in November 2020. This achievement was earned after a detailed annual performance assessment of all 36 Nigerian states under the State’s Fiscal Transparency, Accountability and Sustainability (SFTAS) programme, is a World Bank
funded competitive programme of the federal government which rewards States for meeting specifically set indicators for improved Fiscal T r a n s p a r e n c y , Accountability and Sustainability.
The program report also show Cross River as having strengthened its Internally Generated Revenue (IGR) collection, implemented biometric verification to reduce payroll fraud, improved its procurement practices for increased transparency and value for m o n e y, a s w e l l a s strengthened public debt management and fiscal responsibility framework and improved debt sustainability and also, instituted a more transparent budgeting process over the course of the fiscal year.
Cross River State Commissioner for Finance and Chairman of the State SFTAS Steering Committee, Mr. Asuquo
Ekpenyong Jr., noted that the Independent Verification success is a confirmation of G o v e r n o r Ay a d e ‘ s c o m m i t m e n t t o transparency, accountability and fiscal performance. This achievement by the Ayade-led administration
has set national record and is indeed, an endorsement by the world’s fore-most international financial institution, the World Bank”, he revealed. While thanking God for the results, the Commissioner said that success was made possible, only through the ever-present supportive goodwill and guidance of Sir Ben Ayade.
“ C r o s s R i v e r S F TA S Steering Committee is made up of the Internal Revenue Service, office of Accountant-General, Budget office, Bureau of Due Process, office of the Auditor-General and the debt Management office”, he revealed. Interestingly, too, for scoring 100% in World Bank 2020 Fiscal Year, the State has also, proudly achieved a total sum of $20.4m (Twenty million, four hundred thousand US Dollars) as a result of scoring 100 per cent for all Fiscal, Transparency and Accountability indicators of the World Bank in the 2020 Fiscal Year. This was earned after a detailed annual performance assessment of all 36 Nigerian states under the States’ Fiscal Transparency, Accountability and Sustainability (SFTAS) programme. This grant achievement places Cross River State at the top among the 36 States in the Federation and sets a national record for the fiscal year.
The Federal Ministry of Finance, Budget and National Planning oversee SFTAS, while the Office of the Auditor-General of the Federation acts as the independent verification agent. It could be recalled that an Independent Verification Agent (IVA) delegation from the Federal Government on August, 2020 led by Mrs Isioma Bola-Audu visited Calabar for several days to undertake a comprehensive audit and verification exercise as part of the validating criteria for the World Bank State Fiscal T r a n s p a r e n c y , Accountability and Sustainability (SFTAS) Programme for results. As a result of that exercise, the Cross River State Ministry of Finance secured the sum of $10.4M which has subsequently increased to $20.4 million after Cross River State further scored 100% in the 2020 Additional Finance Annual Performance Assessment (APA ) carried out in November 2020. The report also notes that Cross River State has strengthened its Internally Generated Revenue (IGR) collection, implemented biometric registration and verification to reduce payroll fraud; improved its procurement practices for increased transparency and value for money; strengthened its public debt management and fiscal responsibility framework; improved debt sustainability and instituted a more transparent budgeting process over the course of the fiscal year.
State Commissioner for Finance and Chairman of the State SFTAS Steering Committee, Mr Asuquo Ekpenyong Jr. revealed that the independent verification success is a confirmation of G o v e r n o r Ay a d e ‘ s c o m m i t m e n t t o
transparency, accountability and fiscal performance. “This achievement by the Ayade-led administration”, HE said, has set national record and is indeed, an endorsement by the World Bank, the world’s foremost international financial institution.
He therefore, assured all that the funds will be properly utilized in accordance with the Governor’s vision in the 2021 budget, nothing, “For us to attain this enviable feat, it would be recalled that, we all worked day and night, even at weekends and holidays, including the lockdown period”, while he also, appreciated staff and heads of MDAs, who played very vital and critical roles during the exercise.

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INSURANCE State Govt: Risk Averter, Risk Neutral or Risk Preferer?

“…It is for the interest of the state government to embrace insurance, by becoming a risk averter consumer”

The basic demand for insurance arises from the satisfaction that a consumer gains from the increase in financial security achieved by transferring the risk of loss or damage through an insurance broker to an insurer. the operation or function of insurance has several important implications for the consumer

1. In return for the payment of a premium in advance, the consumer is able to transfer some of his
risk (but not all) to the insurance company. Indeed, not all the uncertainty because not all risks are

2. the unknown cost of risk of replacement of a subject matter is substituted by a known cost, namely the premium payment made at a particular time for an agreed period.

3. the consumer is left to bear all those risks that cannot be insured plus all those insurable risks that he chooses to retain for reasons best known to him.

Where shall we place the Cross River State Government on the above three points? Your guess is as good as mine. that is, the consumer is left to bear all those risks that cannot be insured plus all those insurable
risks that the consumer chooses to retain. this brings us to the main topic of this article, whether the state government is a risk averter or a risk neutral or risk preferer. the position of the state government can influence the elasticity of demand for insurance in the state. the Friedman and Savage theory states that, a consumer who dislikes the existence of risk and does not want to tolerate or retain it, is known as a risk averter. So clearly, a risk averter is an individual or organization or government that is prepared to pay an agreed amount in excess of the expected cost of risk in order to have the risk removed. Let me ask, how much of her insurable risks had the state government transferred to the insurer through an insurance broker for an agreed premium?

A consumer who is indifferent as to whether a risk exists or not is known as a risk neutral. thus a risk neutral person is not prepared to pay any amount in excess of the expected cost of risk in order to remove it. In other words, a risk neutral consumer would retain his risk. He will not insure his property no matter the cost. With this explanation, is the state government a risk neutral consumer? What do you think? the following underwriters and intermediaries closed their branches and relocated to nearby states:

• America International Insurance Co. (AIICO)

• Regency Insurance Company Ltd

• Consolidated Hallmark Ins. Plc.

• Equity Assurance Plc.

• Corner Stone Insurance Plc.

• LASACO Assurance Plc.

• Sovereign Trust Assurance Plc.

• Stock Bridge Insurance Brokers

• Afam Insurance Brokers

• Vision Trust Insurance Brokers

• Laudable Insurance Brokers

• these risk bearers and intermediaries moved out of Calabar to very nearby states because of:

• Poor business climate in the state

• Poor patronage from the state government

• Multiple taxation and levies

• the current business trend in the state, whereby individuals, organizations and indeed government function as risk neutrals.

I am very sad because the closed insurance organizations in the state moved out to nearby states without the employees employed in the state. I think only one Cross Riverian was fortunate to move with his company to another state. Now who is a risk preferer? A risk preferer is a person or organization that
would actually seek out risky situations by entering into gambling contracts, and would be prepared to pay a price in excess of expected winnings in order to participate in the gamble. Since insurance is not gambling, such a person or organization would not seek insurance cover. The government is said to be the biggest spender. the resources of the state government though limited cannot easily be quantified. there are so many government-owned industries springing up in the state kudos to His Excellency
Senator Prof. Ben Ayade, the digital Governor of Cross River State. We are priding ourselves of enjoying an industrial revolution in the state. this had naturally translated to more jobs for the youths.

However, we need more buyers of goods and services and more buyers of insurance products. the risk bearers and insurance intermediaries are not enjoying the state government patronage, hence the closure of many underwriting houses and brokerage offices. It is for the interest of the state government to embrace insurance, by becoming a risk averter consumer. the state government can positively
contribute to the survival of the insurance sub-sector in the state by coming up with a deliberate policy on insurable risks of the state. It is pertinent for the state government to save the remaining 13 underwriting houses and intermediaries from packing out of the state or simply going under. God bless Cross River State!

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World Bank (SLOGOR) Partners IRS to Enhance Voluntary Tax Compliance

“…It is expected that for the desired level of voluntary compliance to be achieved, tax payers should be involved in participatory communication”

In furtherance of its core vision of being a revenue agency with an optimal tax system that ensures voluntary compliance and makes Internally Generated Revenue (IGR) the catalyst for the state’s socio-economic development, Cross River Internal Revenue Service (CRIRS) has taken a giant step towards improving voluntary compliance through a strategic partnership with the World Bank through it State and Local Government Reforms (SLOGOR) Project. the emphasis of the World Bank intervention programme is to assist the CRIRS create an enabling environment hat would enhance voluntary tax compliance. the Cross River IRS, understood the relationship between Internal Revenue generation and the capacity of government to provide infrastructural development or other transformational initiatives as currently being undertaken by Prof. (Sen) Ben Ayade, the Executive Governor, which would ultimately engender the State’s economic growth. the Federal Government of Nigeria has received a grant from the International Development Agency (IDA) – acting as an administrator of a trust fund from the
European Union and managed by the World Bank, for the implementation of the State and Local Government Reforms (SLOGOR) Project in six Nigerian states of Anambra, Cross River, Jigawa, Kano,
Osun, and Yobe.

The overall developmental objective of the SLOGOR Project, is to improve transparency, accountability and quality service delivery of public financial management in Nigeria. the Cross River Internal Revenue Service being one of the beneficiaries of the grant, has initiated the following remedial programs to
optimize the deployment of the World Bank Intervention Fund;

• Sensitization and enlightenment of taxpayers for voluntary tax compliance

• Study tour of CRIRS staff to other states’ IRS

• Review and strengthen CRIRS’ organizational structure

• Engagement of consultants to review CRS Revenue Laws

• Assist IRS design and implement a performance measurement and evaluation system

• Retreat/workshop events to assist IRS and revenue MDAs in the state internalize the Cross River State Revenue Administration Law (Amendment) 2015, as a policy instrument for revenue administration in Cross River State.

• Procurement, customization and installation of an electronic taxpayer database management system
(EDMS). Other areas of focus include, increased IGR, improvement of staff welfare and capacity development, increased efficiency and transparency in automation of IRS services and strengthening of internal and external stakeholders’ engagements. Speaking at a Press Conference organized by the SLOGOR’s media consultant, Mr Patrick Ugbe, who is also the Chief Executive Officer of Hit F.M. in
conjunction with CRIRS on the 23rd January, 2019, as part of activities to kick start a six-month media campaign, the Executive Chairman of IRS, Mr Akpanke Ogar, said the campaign was aimed at
developing and delivering an efficient media advocacy program, targeted at various stakeholders across the state towards voluntary tax compliance. According to Mr Ogar, it is the policy of the CRIRS to pursue an engagement process with the general public that would secure voluntary tax compliance in revenue

this also involves, town hall meetings, press releases, radio talk show, mounting of billboards, among others. these are primarily aimed at enhancing tax payer’s education and enlightenment on the activities of the CRIRS thereby, showcasing the importance of taxation as a viable means of raising funds for
sustainable development. the IRS Chairman expressed the resolve of the service to improve revenue generation as well as put necessary machineries in place for tax payers to conveniently pay their taxes through the new e-payment platform from the comfort of their homes. Also, the establishment of 24-
hour help-desk will ease information flow between the service and members of the public, blockage of revenue leakages, review of the Revenue Administration Law, enumeration of tax payers for a current and reliable data base of all tax payers in the state, amongst others.

As the Executive Chairman rightly observed, the policy of voluntary tax compliance enjoys the full support of all stakeholders, including the state government and the World Bank. the next strategy however, is to explore avenues of deepening partnership with the press to achieve full engagement of members of the public and tax payers in particular, on the subject of voluntary tax compliance and
widening of the state’s tax net. And since it is the policy of CRIRS to pursue an engagement process with the general public, it is expected that for the desired level of voluntary compliance to be achieved, tax payers should be involved in participatory communication where they are properly informed that revenue collected from them by government is a means of citizens’ participation in governance and also a demonstration of good citizenship.  is again could be achieved through other communication strategies like promotions, events sponsorship, advertisement, brand culture, billboards, improved media relations, amongst others. All of these could serve as a long-term platform for the enforcement of voluntary tax compliance, considering the huge support from the World Bank through SLOGO


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Group Life Assurance and Pensions Reform Act

Any person, who contravenes any provisions of this Act, where no penalty is prescribed under this Act, commits an offence and is liable on conviction to a fine not more than N250,000.00


Life assurance is primarily a means of providing for one’s dependants in the event of sudden or natural death within the duration of the policy. It is also a provision for old age. It takes courage, determination and unselfish love of one’s family to buy life assurance. Individuals can take life assurance for a combination of benefits, such as protection, security, savings and investment. The purchase of a life assurance policy is not a license to die. Statistics show that 95% of life policyholders lived to maturity age. Why not invite a registered Insurance Broker to advise you on your insurance needs. But what is group life assurance? Group Life Assurance is a life protection cover usually provided by the employer of labour for the benefit of their employees. When Pension Scheme administration was in the hands of registered life insurance companies, group life assurance was included in Staff Pension Schemes sold by these companies. The group life cover was however, not compulsory or mandatory, much as the establishment of staff pension in a company.


Today, the story has changed, the establishment of a contributory staff pension scheme along with group life assurance scheme are now mandatory in Nigeria. Hence some workers view it as a do or die affair. Thanks to 2004 Pension Reform Act which was repealed and substituted by the 2014 Pension Reform Act as amended. 2004 Pension Reform Act All employers of labour including the federal, states and local governments are mandated to purchase a group life assurance scheme for the benefit of their employees. For the avoidance of doubt, the 2004 Pension Reform Act states:- In addition to the rates specie in subsection (1) of this section, employers shall maintain life insurance policy in favour of the employee for a minimum of three times annual emolument of the employee. Section 1 sub-section 2 of the Act states that, the scheme (Contributory Pension and Group Life Assurance) shall apply to all employees in the Public Service of the Federation, States and Federal Capital Territory and Private Sector. Sub-section 2 (b) of the Act states, “in the case of Private Sector, who are in employment in an organization in which there are 5 or more employees”. What the Act is simply saying is that, employer with a minimum number of 5 employees or more is eligible to establish a contributory staff pension scheme with group life assurance of three times total annual emolument. The Contributory Staff Pension Scheme which shall be administered by a Pension Fund Administrator has the following:

Employer 7.5%

Employee 7.5%

The 2014 Pension Reform Act as amended brought down the minimum number of employees in a private company to three only. This means that a company with only three employees is qualified to establish a contributory pension scheme. The Act also increases the rate of contribution to 18% Employer – 10% of the employee’s total emolument Employee – 8% of his or her gross annual salary. Both contributions are paid to the employee’s retirement savings account kept by the Pension Fund Custodian (PFC).  The PFC namely, the commercial banks are appointed by the National Pension Commission to take custody of pension funds.

The contributory staff  pension scheme and group life assurance had long been established for the benefit of Federal Civil Servants and also a good number of purposeful States Government had localized the 2014 Act and implemented it for the benefit of their employees.


As stated in the 2014 Pension Reform Act as amended, the mandatory group life assurance scheme is non contributory. And indeed, there is no contributory group life assurance scheme. The employer is under obligation to pay full annual premium for the benefit of the employees. But what is the objective of group of life assurance scheme?


  1. To mobilize funds that guarantee speedy payment of death benefits.
  2. To give the workers a sense of belonging
  3. To ensure equal treatment for all categories of workers and families of deceased’s employees.
  4. To save the employer (Government or Private Company) from stressful conditions associated with negotiations with the family or families of deceased employee(s).

The 2014 Pension Reform Act as amended brought down the minimum number of employees in a private company to three only. This means that a company with only three employees is qualified to establish a contributory pension scheme


  1. To minimize distractions in administration emanating from death of an employee.

Group life assurance is one of the cheapest form of life assurance, but  with unprecedented benefit to one’s family. For instance, a 25 year old employee on gross annual salary of N1,020,000.00 will be N1,020,000.0 x 3 = N3,060,000.00 = N10,090.00. That is, three times of his gross annual salary equals the sum assured in event of death while in service, the annual premium payable for the big sum assured is only N10,090.00. What an insurance cover! Establishment of group life assurance should be seen as a welfare scheme for the employees. It is no longer an optional insurance policy but mandatory or compulsory for all employers of labour with at least 3 (three) permanent employees.

There is a penalty for violators of the 2014 Pension Reform Act as amended under Offences, Penalties the and Enforcement of Powers, section states. “Any person, who contravenes any provisions of this Act, where no penalty is prescribed under this Act, commits an offence and is liable on conviction to a fine not more than N250,000.00 or to imprisonment for a term not exceeding one year or to both fine and imprisonment. So, which one is easier, to pay-a fine of N250,000.00 or to arrange for a group life assurance for your workers, which may not cost up to N100,000.00 per annum?  The benefits and advantages of group life assurance scheme far outweigh the disadvantages if any. Let’s take a second look at the benefits and advantages of having a group life assurance scheme in either public or private sector.

  • No employee in such establishment will be cheated; all would enjoy equal treatment in the event of death.
  • Employer will no longer face the family of bereaved employees to negotiate payment of death benefits.
  • Individual’s next of kin (widow or widower) shall be in a position to see death benefits schedule for verification at the Personnel office.
  • No bereaved family member would have cause to complain of poor or unjust treatment or late payment of death benefits.
  • The group life assurance may eliminate the problem of ghost workers in public service.
  • The scheme will facilitate the production of accurate statistical data of the employees in both public and civil service on yearly bases.
  • Now that the Devil has turned burial to a merry making event, group life would provide enough money for the family of a deceased employee to lavish. Death benefits are settled easily under group life assurance, provided the required documents are submitted to the Consultant or Insurance Brokers of the scheme on time. the following are the documents to support a death claim report:
  1. A written offcial Report ofDeath
  2. Attendant Physician Report
  3. Certificate of Cause of Death
  4. Staff Identity Card
  5. Police Report if Death is by accident
  6. Police and Fire Service reports, if death is by fire hazard.

Your Insurance Brokers will assist until death claim cheque is issued by the Insurer. Do you have group life assurance scheme in your establishment? Should a brilliant child’s education be disrupted just because of the death of a parent? Should a widow start begging for bread just one month after the death of her husband? The answers to the above questions rest with the purchase of a life assurance policy or child education. link about this and act wisely.


John E. Urom


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Imperatives of Voluntary Assets and Income Declaration Scheme (VAIDS) “There will be no hiding place for tax evaders”

Nigeria’s economy has depended predominantly on crude oil sale, until recently where emphasis has shifted from oil revenues to Internally Generated Revenue specifically from taxes as a veritable source of funding sustainable development and national security. This is direct fall out of the global  financial meltdown which affected virtually every country of the world. It is also a known fact that government responsibilities in terms of development projects have also become increasingly enormous in the face of dwindling funds at her disposal.

Nigeria’s tax system is based on global best practice. It is a progressive system that ensures fairness which implies that those with the highest income levels should shoulder the greatest proportion of the tax burden. Whilst considerable progress has been made with taxing those in formal employment and self-employed persons, professionals and some companies are able to evade full tax payment due to the inability of the tax authorities to assess their true income and thereby tax them accurately.

According to the Joint Tax Board (JTB) as at May 2017 the total number of taxpayers in Nigeria is just 14 million out of an estimated 69.9 million who are economically active. Nigeria’s tax to GDP ratio, at just 6%, is one of the lowest in the world (compared to India’s 16%, Ghana’s 15.9%, and South Africa’s 27%). Most developed nations have tax to GDP ratios of between 32% and 35%. Nigeria’s low tax revenues are at variance with the lifestyles of a large

number of its people with the value of assets known to be owned by Nigerian residents around the world. There has been a systemic breakdown of compliance in the tax system with various strategies used to evade tax obligations. These include but are not limited to transfer of asset overseas, the use of o_ shore companies in tax havens to secure assets, and the registration of assets in nominee names. In addition despite having some of the most pro_ table and well capitalized companies in Africa, the level of tax remittance is low. It is in the light of the above that the Federal Government via an Executive Order no. 4 of 2017 initiated the Voluntary Assets and Income Declaration Scheme (VAIDS) to improve voluntary tax collection. It is also aimed at providing opportunity for tax payers as well as an amnesty window for tax defaulters to voluntarily declare their assets and income and pay their due taxes to qualify for waivers in terms of tax arrears or underpayment for the past 6 years.


The scheme was initially designed to take effect from July 1, 2017 with nine months amnesty window scheduled to end on the 30th of March 2018, but in response to public appeals, the deadline was shifted to 30th June 2018 to enable more tax defaulters to take advantage of the scheme which covers all federal and state taxes like Company Income Tax, Personal Income Tax, Capital Gain Tax, Petroleum Profit Tax, Stamp Duties, Tertiary Education Tax and Tenement Rate. All taxable persons and entities including individuals, Trust, Executors, registered companies and statutory companies are also covered by the scheme.

The question one might be tempted to ask is why the emphasis on VAIDS

when I have been paying my taxes? The answer of course is simple. According to the Hon Minister of Finance, Mrs. Kemi Adeosun, VAIDS specifically targets tax payers who have not been declaring their income/ assets; those who have not been paying their due tax; those who have been underpaying or under-remitting taxes deducted. Also included are those who are engaged in one tax dispute or another with relevant tax authorities but are prepared to settle such disputes out of court tax payers who are yet to register with the tax authority as well as existing tax payers who have new disclosures to make concerning their assets and income. It is important to remark here that it does not matter whether the relevant tax default arose from undisclosed asset within or outside the country, what actually matters is that the scheme is providing a once in a life time opportunity for tax defaulters to declare their tax liabilities and resolve it amicably with the relevant tax authorities, be it Federal or State. VAIDS is a time limited opportunity for taxpayers to regularize their tax status relating to previous tax period in this case for the past 6 years. And in exchange for fully and honestly

declaring previously undisclosed assets and income, tax payers will benefit from forgiveness of overdue interest and penalties and the assurance that they will not face criminal prosecution for tax offences or be subject to tax investigation. In realization of the importance of the VAIDS scheme and the discovery that of all the States in the Federation, Cross River is ranked the lowest in terms of response rate to compliance, that the Cross River Internal Revenue Service held a three day sensitization forum in the 3 Senatorial Districts of the State for stakeholders to take advantage of the awareness campaign on VAIDS to regularize their tax positions devoid of penalties and interest for noncompliance.

According to the Acting Executive Chairman of the Cross River Internal Revenue Service Mr. Akpanke Ogar, in spite of efforts made by the CRIRS to generate awareness in the VAIDS program, the service observed that participation by residents in the State is abysmally low compared with result posted by other States In any case, the import of the VAIDS Scheme is that the window of opportunity will be closed automatically after the end of June 2018, thereafter, the law will take its course: and as the VAIDS slogan goes, ‘there will be no hiding place for tax evaders’, no matter your connection to the corridors of power or your position in the society. There shall be no sacred cows under VAIDS, everybody is expected to declare where they have previously underdeclared.

Stakeholders are enjoined to take advantage of this window of opportunity and visit the offices of CRIRS and FIRS for their VAIDS form. Where in doubt, please you can call


the Cross River State Internal Revenue

Service’s Helpdesk on 08025670608,

08066276829 or visit our website @


Good citizens pay their taxes; it’s your civic duty. Pay your tax to support Senator (Prof) Ben Ayade’s development projects.

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Treasury Management And Public Accountability

“Strict compliance with all these laws by the office of the Accountant General, Office of the Auditor General and all public officers will ensure public accountability in Government.”

TREASURY MANAGEMENT The treasury management functions include the following:


All Government revenue is lodged into Government Revenue Accounts opened in various banks approved by government. The accounts include: (i) Statutory Revenue from Federation Account; (ii) VAT (Value Added Tax); etc. All Statutory Expenditures like salaries, pension and gratuity, overheads and capital expenditure are disbursed from these accounts. (iv) Other classes of revenue include the Internally Generated Revenue, PAYE TAX, revenue generated from school fees and all other types of revenue generated by the Internal Revenue Services are lodged in appropriate accounts in different banks and immediately swept into the Consolidated Revenue Account also known as Ministerial Single Account (MSA). It is used to fund pressing financial demand of government on daily basis.


All disbursement of government funds is made through payment voucher duly authorized by the appropriate authority, well prepared, processed and passed for payment. Different classes of vouchers include Recurrent Vouchers, Remittance Vouchers and contract vouchers for capital projects. All payment vouchers must be properly prepared with complete documentation before submitting to the Treasury for payment. The officer preparing payment voucher is to be guided by Financial Regulation 601, 602, 603, 604,605,606,607,608,609 and 610.

For example,

  1. Vouchers shall be made out in ink or typewritten (FR 604[a]).
  2. All copies of vouchers must be legible (FR. 604 [a]).
  3. The totals on the voucher should be written in ink in words as well as in figure (FR. 604[a]).
  4. No erasure of any kind whether in typescript or manuscript is allowed (FR. 604[b]).
  5. No alterations to the amount on voucher whether in words or figures are allowed. A new voucher must be prepared when necessary (FR.610).
  6. The information furnished on the voucher must be correct in all


One of the most important Treasury Management functions is the preparation of financial Statements and analysis. The office of the State Accountant General produces its financial Statements using the ORACLE E-BUSINESS SUITE.

In other words, the financial statements are Oracle-based, utilizing fully a 35 digit CRS Oracle compliant chart of accounts. For purpose of clarity, permit me to give brief explanation on how financial Statements are prepared by the office of the State Accountant General. Voucher Analysis

Vouchers are classified into revenue and payment vouchers and they are analyzed separately as follows:

  • Revenue Vouchers: Revenue receipts emanate from two sources:
  1. Revenue Receipt by Cash control: Revenue reported by Cash Control are backed by the relevant Receipt Vouchers and when it is received by the Final Account Department, a new Journal is opened in the Oracle E-Business Suite and it is categorized as “Revenue Journal”. The Receipt Vouchers are coded before entering into the Oracle Journal.
  2. Interswitch Revenue (PAY DIRECT): Here, government revenue is paid direct to the bank account designated for that purpose. The revenue is down loaded daily from the Interswitch into Government Revenue Accounts. The downloaded revenue is up loaded daily into the Oracle General Ledger. The revenue is then posted to the appropriate Revenue Heads.
  • Processing of Paid Payment Vouchers: Here, the vouchers are entered through the invoice workbench. After proper coding of the vouchers:
  1. They (vouchers) are validated to confirm that the proper code has been used and apply it against the budget (creating account)
  2. The validated payment vouchers are paid through the system after selecting the bank and the cheque number used for the payment.
  3. After payments and at the end of every month, paid vouchers in the Account payable module are transferred to the General Ledger. An officer logs to the General ledger and posts all the invoices by transferring them to different expenditure Heads.
  • Financial Reporting: Government financial reports state the financial position of government in a particular period and the report should disclose the level of accountability, transparency and probity in the handling of government resources by those in government within that period.

A good government financial report should necessarily possess the following attributes:

  • It should be prepared in a way that it will not be in conflict with the provisions of the Constitution of the Federal
  • Republic of Nigeria and other legal requirements.
  • The reporting entity should be able to state the purposes for which government resources are being released and expended.
  • It should be related to budget classification.
  • It should provide reliable and relevant financial data that will be useful for economic analysis.
  • It should relate to certain financial period e.g. One financial year.
  • The report should be prepared on time and be released for use within a reasonable period.
  • It should state the Accounting basis, assumptions etc on which its preparation was based.
  • Government financial Report should state the financial position of Government, which shall disclose the level of accountability, transparency and probity displayed in the handling of Government resources by those in Government.
  • The Financial Statements produced by the office of the State Accountant General complied with all the attributes enumerated above.

The financial report has 4 main financial statements and 19 notes to the Accounts as shown below:

STATEMENT 1 – Cash Flow Statement:

This is the summation of the effects of revenue and expenditure relative to:

  • Operating Activities
  • Investment Activities
  • Financing Activities, to show its increase or decrease in cash and its equivalents.

STATEMENT 2 – Assets and Liabilities

This is similar to the balance sheet in the private sector. It shows the assets owned and the liabilities owed by the Government at a particular period in time; the cut-off-date is normally the last working day in December of every year.

STATEMENT 3 – Consolidated Revenue Fund

This is the aggregation of all Government funds from different sources weighed against the expenditure of government on different expenditure Heads/ Classification to make up the Consolidated Revenue Fund with appropriation for capital Development Fund, Public Debt Servicing etc.

STATEMENT 4 – Capital Development Fund

This Statement records the net effect of capital Receipts and Capital Expenditure. It measures the amount committed to infrastructural development of government at a given period in time. This statement records all capital receipts like VAT, Transfers from consolidated Revenue Fund (Statements), loans obtained for capital development, Grants and subventions etc.

The second leg of the Statement is the capital Expenditure which is sectored into 4, namely: Economic Sector, Social Sector, Regional Development Sector, and General Administrative Sector. Expenditure on each of these sectors is reflected against the sector which also shows the level of government investments in that sector within a given financial year.

Other reports which further explain government expenditure are notes 1 – 19:

Note 1 – Gross Statutory Allocation; 2 – Internally Generated Revenue; 3 – Value Added Tax (VAT); 4 – Capital Receipts; 5 – Personnel Cost; 6 – Recurrent Expenditure and 7 – Consolidated Revenue Fund Charges. Also among them are notes 8 – Capital Expenditure by Sector; 9 – Cash and Cash Equivalent; 10 – Cash and Bank Balances; 11 – Due from MDAs (Imprest) and 12 – Investment and General Account. Notes 13 – Taxes (Direct and Indirect); 14 – Fines and Fees; 15 – Licenses; 16 – Earning and sales; 17 – Rent on Government property; 18 – Interest and Dividends and 19 – Miscellaneous are the rest. All these are normally included in the accounts as appendixes for reference.


To ensure Public Accountability in government, Treasury Management is guided by the following regulatory framework:

1. The Constitution of the Federal Republic of Nigeria, 1999:

There are some sections of the constitution that regulate the operation of public Sector Accounting. For example; Sections 80 and 81 of the 1999 constitution stipulates that all government revenue shall be paid into the consolidated Revenue Fund. It regulates the allocation of revenue, the audit of public accounts, the budget procedure and other financial matters. Section 82 of the 1999 constitution authorizes withdrawals from the Consolidated Revenue Fund by the President or the Governor for a maximum of six months in case of default or delay of budget approval.

2. The Finance (Control and Management) Act of 1958:

This governs the management and operation of all government funds. Some of the provisions of the Act are as follows:

  • The Act placed the management of public finance, especially the CRF under the Minister/Commissioner of Finance. E.g. issuance of Annual General Warrant.
  • It also established the Development fund and states its operation. It stipulates accounting format for the preparation of government Account.
  • Adoption of Cash Basis of accounting for the CRF.
  • Preparation of Government Account on Fund Accounting basis.
  • It mandates the Accountant General to submit Accounts for Audit.

Section 33 of the Audit Act, 1958 stipulates that the Accountant General shall render to Auditor General accounts showing government finances at the end of the financial year and these shall include:

  1. Statement of Assets and Liabilities
  2. Statement showing the sums estimated to be received as revenue into the consolidated Revenue Fund and the sums actually received in the period of account
  3. A statement showing sums estimated to be issued out of consolidated
  4. Revenue Fund and the sums actually so issued in the period of account.
  5. A statement showing the sums estimated to be received into the Development fund and the sum actually received in the period of account,
  6. A statement showing the sum estimated to be issued out of Development fund and the sums actually so issued in the period of account.
  7. Any other statement as may be required.

3. Audit Act of 1956 mandates

The Accountant General to submit within six months after the end of each financial year the Account of Government to the Auditor-General for audit. The Act also sets out the duties of Auditor General. It covers the area of Audit and Accountability in Government.

Section 13 of the Act requires the Accountant General to submit as part of the Annual Accounts:

  1. An abstract account of receipts and payments.
  2. A statement of assets and liabilities at the close of the financial year.
  3. Detailed statement of revenue and expenditure according to heads and sub-heads.
  4. Such other statements as may be required from time to time.

4. Financial Regulations, Revised to 2009:

These are regulations which are issued to regulate various financial matters and set rules and procedures for Public Accountability. They specify the rules and regulations on opening of bank accounts, collection of revenue, security of documents, revenue control, issuance of cheques and payment procedure, etc.

5. Appropriation Act/Law:

These are bills; either money bills or others passed into law by the National or State Assemblies. Appropriation Law states the revenue to be received and amount to be spent on each programme on the approved estimates.

 6. Treasury Letters/Circulars:

These are directives issued in form of circulars, letters, or memo to guide the day-to-day activities of government MDAs.

7. Gazette:

This is the government official newsletter published periodically and contains all government policy statements like appointment of new officers, retirement, financial statement, release of warrants, advertisement on contracts, etc.

8. Public Service Rules:

These deal mostly on personnel matters.

9. International Public Sector Accounting Standards (IPSAS):

These are a set of standards issued by IPSAS Board for use by public Sector entities around the world in the preparation of financial statements. The objective of IPSAS is to improve the quality of General Purpose Financial Reporting by Public Sector entities, leading to better informed assessments of the resource allocation decisions made by government thereby increasing transparency and accountability.

10. Other legislations include Fiscal

Responsibility, Public Procurement, State/Public Finance Management and Debt Management laws. Strict compliance with all these laws by the office of the Accountant General, Office of the Auditor General and all public officers will ensure public accountability in Government.

Compiled by Ikang who is the Permanent Secretary, Ministry of Finance, is a Chartered Accountant (ACA) and was the former Director of Accounts (Treasury) in the Office of the Accountant General in the Administration of former Governor Liyel Imoke.

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